1. The Patented Medicines (Notice of Compliance) Regulations Don Cameron Bereskin & Parr LLP April 17, 2014

2. 2 The Canadian Pharmaceutical Regulatory Regime – The PM(NOC) Regulations I.A Brief History of the PM(NOC) Regulations II.The Drug Approval Process in Canada III.Pharmaceutical Patent Law – The Current System Overview Patent Register PM(NOC) Regulations Litigation under the PM(NOC) Regulations Data Protection

3. I. A BRIEF HISTORY OF THE PM(NOC) REGULATIONS 3

4. Compulsory Licences 1923: – Compulsory licences provided for food and drugs. Iff active ingredients were made in Canada 1969: – Compulsory licences granted for imported active ingredients – The birth of Apotex and Novopharm (now part of Teva)

5. 5 Compulsory Licences By early 80’s: Generic companies could manufacture, sell and import a patented medicine before the expiry of a patent, provided: – drug was shown to be “safe and effective” – paid a royalty to patent owner: always 4% Result: – Pharma patents were virtually useless – Scared away drug research in Canada

6. 6 I. A Brief History of the PM(NOC) Regulations 1980’s: USFTA negotiations: – Pressure on Canada to remove our “third world” compulsory licensing system Parliament began re-vamping patent laws to rebalance the compulsory licensing regime in order to generate growth in the pharmaceutical industry and in light of international trade obligations Led to major overhaul of the patent system in 1987-1989 1987: Bill C-22 Introduced: – deferral of 7-10 years before compulsory licence could be granted (further protection for drugs invented in Canada) – Patents on the pharmaceutical product itself, not just the process of making it – Patented Medicine Prices Review Board

7. 7 I. A Brief History of the PM(NOC) Regulations 1991-1993: NAFTA/GATT TRIPS Minimum standards of IP for all nations participating International pressure on Canada to terminate compulsory licensing NAFTA/TRIPS: Exclusive right to make, use, sell, import and licence patented product 1992 – Bill C-91 Abolished prospective compulsory licences post 1991

8. 1992: Bill C-91 Bill C-91 established “early working” and “stockpiling” exceptions to patent infringement “Early Working” – Section 55.2(1) of the Patent Act (for obtaining regulatory approval) “Stockpiling” preceding the expirty of the patent (to hit the ground running) exception was abolished in 2001 as being inconsistent with Canada’s international treaty obligations PM(NOC) Regulations brought into force

9. 9 I. A Brief History of the PM(NOC) Regulations PM(NOC) Regulations: Link the drug regulatory approval system and the patent system Enhance protection for pharmaceutical patents by requiring a generic drug manufacturers to “clear” relevant patents prior to obtaining regulatory approval

10. 10 I. A Brief History of the PM(NOC) Regulations 2006: Major amendments to the PM(NOC) Regulations brought into force to address perceived deficiencies in the regime Operation of the Regulations reaffirmed and clarified Established an 8-year data protection for patented medicines to guarantee a minimum term of market exclusivity to patentees Protected data is the bundle of confidential information that is submitted to Health Canada to obtain market authorization

11. II. THE DRUG APPROVAL PROCESS IN CANADA 11

12. 12 II. The Drug Approval Process in Canada All drugs sold in Canada must be authorized for sale by Health Canada For a “new” drug, the manufacturer submits a New Drug Submission (“NDS”) setting out all data establishing the safety and efficacy of the drug (obtained through rigorous clinical testing) Health Canada reviews the submitted information and evaluates the drug’s safety, efficacy and quality At the completion of the review, if Health Canada has approved the new drug, it issues a Notice of Compliance (“NOC”) which permits the drug to be marketed in Canada

13. 13 II. The Drug Approval Process in Canada Innovative pharmaceutical company is typically the first person to discover/develop a drug and/or a new therapeutic indication Therefore, an NDS is typically filed by an “innovative” pharmaceutical company Generally, an innovator will have one or more patents pertaining to a new drug Any changes to the approval (change of name, packaging, product monograph) requires a Supplementary New Drug Submission (“SNDS”)

14. 14 II. The Drug Approval Process in Canada “Me too” – Unlike innovator, a generic manufacturer need not establish safety and efficacy of a generic drug – Generic need only demonstrate bioequivalence to a drug which is already on the market and has been approved by Health Canada “Bioequivalence” = the active ingredient of a generic drug be absorbed into the body and metabolized in approximately the same amount over approximately the same period as the active ingredient of the innovator drug

15. 15 II. The Drug Approval Process in Canada To obtain marketing approval for a generic drug, the generic manufacturer submits an Abbreviated NDS (“ANDS”) demonstrating that the generic formulation is “bioequivalent” to the brand formulation – ANDS typically does not contain clinical data By establishing bioequivalence, generic demonstrates safety and effectiveness by comparison, without having to do extensive clinical trials – Significantly less money and time required to bring generic drug to market

16. III. PHARMACEUTICAL PATENT LAW – THE CURRENT SYSTEM 16

17. 17 III. Pharmaceutical Patent Law – The Current System The current system reflects Parliament’s attempt to strike a balance between two competing objectives: (i) provision of low- cost, high-quality pharmaceuticals, and (ii) protection of innovation and stimulation of R&D Generic manufacturers are given the benefit of “early working” for a drug approval prior to patent expiry but must address patent issues prior to obtaining marketing approval Innovators are given the benefit of 8-years of data protection – Generic manufacturers are prohibited from filing an ANDS or triggering litigation under the PM(NOC) Regulations for the first 6 years of the 8 year term (except for submissions made under the Jean Chrétien Act)

18. III. Pharmaceutical Patent Law – The Current System - Linking Patent status Valid, infringed patents can block entry of generic Register of patents relating to an approval No practical was to get an interlocutory injunction Q: Are the generic’s allegations of non-infringement and invalidity justified? HPB Approval Can’t grant approval until patent issues are resolved on a preliminary basis Minister can’t grant a generic approval for 2 years, pending PM(NOC) proceeding

19. 19 III. Pharmaceutical Patent Law – The Current System Overview Astra Zeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49 at para. 12: The NOC Regulations lie at the intersection of two regulatory systems with sometimes conflicting objectives. First, is the law governing approval of new drugs, which seeks to ensure the safety and efficacy of new medications before they can be put on the market. The governing rules are set out in the Food and Drugs Act, R.S.C. 1985, c. F-27 (“FDA”), and the Food and Drug Regulations, C.R.C. 1978, c. 870. The FDA process culminates (if successful) in the issuance of a NOC to an applicant manufacturer by the Minister of Health on the advice of his officials in the Therapeutic Products Directorate. The FDA objective is to encourage bringing safe and effective medicines to market to advance the nation’s health. The achievement of this objective is tempered by a second and to some extent overlapping regulatory system created by the Patent Act, R.S.C. 1985, c. P-4. Under that system, in exchange for disclosure to the public of an invention, including the invention of a medication, the innovator is given the exclusive right to its exploitation for a period of 20 years. Until 1993, the two regulatory systems were largely kept distinct and separate.

20. 20 III. Pharmaceutical Patent Law – The Current System Overview Astra Zeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49 at para. 13: The problem perceived by Parliament in 1993 was that if a generic manufacturer waits to begin its preparation of a copy-cat medicine for regulatory approval until the patent expires, the FDA approval process will likely add at least two years to the effective monopoly of the patent owner, which is two years of monopoly longer than the Patent Act contemplates. On the other hand, if the generic manufacturer tries to work the patented invention prior to the expiry of the patent, even if solely to satisfy the FDA requirements for a NOC, it will infringe the patent, thus inviting litigation by the patent owner (and this is a very litigious industry).

21. III. Pharmaceutical Patent Law – The Current System 21 PM(NOC) Regulations Patent Listing ss. 3-4 Generic Notice of Allegation s. 5 Proceedings for a Prohibition Order s. 6 Damages s. 8

22. 22 III. Pharmaceutical Patent Law – The Current System Patent Listing and The Patent Register (sections 3 & 4) Minister of Health maintains a public register of patents based on patent lists submitted by patentees/licensees who file an NDS and to whom an NOC have been issued – “linchpin” of the PM(NOC) Regulations Patents which are listed on the Patent Register are entitled to protection under the PM(NOC) Regulations Minister has a duty to determine what patents are listed and to remove patents that have been listed improperly – f(timing, subject matter & relevance) Generic drug manufacturers have no say on the listing or delisting of a patent on the Patent Register

23. 23 III. Pharmaceutical Patent Law – The Current System Patent Listing cont’d To have a patent listed a “first person” (e.g. an innovator) who files or has filed a NDS or SNDS submits a patent list in respect of the drug to the Minster of Health Not all patents are eligible for listing. To qualify for listing, the patent must meet three (3) key requirements: – (1) Timing – (2) Relevance – (3) Subject matter See Ratiopharm v. Wyeth, 2007 FCA 264

24. 24 III. Pharmaceutical Patent Law – The Current System Patent Listing cont’d - Timing Patent list must be filed – (1) at the time the NDS or SNDS is filed for a drug; or – (2) within 30 days of the grant of the patent There is no mechanism for listing a patent on the Patent Register if a patent list is submitted outside of these timelines Only patent lists submitted in accordance with the above timelines will be accepted. Patent lists submitted separately will be refused as not meeting the timing requirements

25. 25 III. Pharmaceutical Patent Law – The Current System Patent Listing cont’d – Subject Matter Eligible patents listed in respect of a NDS must contain: – (1) a claim for the approved medicinal ingredient; – (2) a claim for the approved formulation containing that medicinal ingredient; – (3) a claim for the approved dosage form containing that medicinal ingredient; or – (4) a claim for the approved use of that medicinal ingredient

26. 26 III. Pharmaceutical Patent Law – The Current System Patent Listing cont’d – Subject Matter Eligible patents listed in respect of a SNDS must contain: – (1) a claim for the approved change in formulation; – (2) a claim for the approved change in dosage form; or – (3) a claim for the approved change in use of that medicinal ingredient

27. 27 III. Pharmaceutical Patent Law – The Current System Section 2 definitions: "claim for the medicinal ingredient" includes a claim in the patent for the medicinal ingredient, whether chemical or biological in nature, when prepared or produced by the methods or processes of manufacture particularly described and claimed in the patent, or by their obvious chemical equivalents, and also includes a claim for different polymorphs of the medicinal ingredient, but does not include different chemical forms of the medicinal ingredient; "claim for the formulation" means a claim for a substance that is a mixture of medicinal and non-medicinal ingredients in a drug and that is administered to a patient in a particular dosage form; "claim for the dosage form" means a claim for a delivery system for administering a medicinal ingredient in a drug or a formulation of a drug that includes within its scope that medicinal ingredient or formulation; "claim for the use of the medicinal ingredient" means a claim for the use of the medicinal ingredient for the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms

28. 28 III. Pharmaceutical Patent Law – The Current System The Patent Register – Ineligible Subject Matter Patents which may not be listed on the Patent Register include: – (1) a purely process patent – (2) a patent for a medical device – (3) a patent claiming only an active metabolite of a medicine contained in a drug for which a NOC is sought – (4) a patent for an impurity present in the final drug product – (5) a patent for a difference chemical form of the medicinal ingredient or uses thereof – E.g. salts, esters, other derivatives

29. 29 III. Pharmaceutical Patent Law – The Current System Patent Listing cont’d – Relevance To be eligible for listing on the Patent Register a patent must be relevant to the drug which is the subject of the submission against which the patent is to be listed i.e. the patent must claim the specific product which the innovator is seeking to sell Therefore, a patent listed with respect to a SNDS must claim the change in use of the medicinal ingredient, formulation or dosage form applied for

30. 30 III. Pharmaceutical Patent Law – The Current System PM(NOC) Litigation – Sequence of Events 1.“First Person” (e.g. Innovator) files a New Drug Submission (NDS) and has patents listed on the Patent Register. 2.When a “Second Person” (e.g. generic manufacturer) files an ANDS referencing the Innovator’s drug, and the innovator drug has associated patents listed on the register, PM(NOC) Regulations are triggered

31. 31 III. Pharmaceutical Patent Law – The Current System Section 5 3.Generic manufacturer must address each patent which is listed for the referenced drug at the time of filing of the ANDS.Generic only has to address patents listed on the Register at the time the ANDS is filed (“frozen register”) 4.Generic can: i.Await expiry of all listed patents before receiving a NOC; ii.Allege invalidity or non-infringement of the patent at issue by filing a Notice of Allegation to the innovator setting out the basis of its allegations

32. 32 III. Pharmaceutical Patent Law – The Current System Section 6 5.Upon receiving NOA, Innovator may, within 45 days, apply to the Federal Court for an order prohibiting the Minister of Health from approving the sale of the generic drug. Innovator argues that the generic’s allegations of invalidity and/or non-infringement are “not justified” At this stage, generic can move to strike the proceedings on the basis that an asserted patent was improperly listed

33. 33 III. Pharmaceutical Patent Law – The Current System Section 7 6.Once an application for an order of prohibition is filed, the Minister may not issue a NOC until the expiry of 24 months, unless: (i)the court finds in favour of the generic, or (ii)(ii) the patent expires Effectively an interlocutory injunction without preconditions having been met

34. 34 III. Pharmaceutical Patent Law – The Current System PM(NOC) Litigation A proceeding under the PM(NOC) Regulations is a judicial review proceeding to determine whether NOC should issue. NOT an action for patent infringement. Proceedings are intended to be summary proceedings governed by the Federal Court Rules regarding applications Must be completed within 24 months. Once 24 month period is over, MOH is no longer prevented from issuing NOC

35. 35 III. Pharmaceutical Patent Law – The Current System PM(NOC) Litigation – Burden of Proof The first person has the legal burden to prove on a balance of probabilities that none of the allegations in the Notice of Allegation is justified Can rely on the presumption of validity, but to its peril Allegations in the Notice of Allegation are presumed to be true until the contrary is proved See Pfizer v. Minister of Health, 2008 FC 11 for a summary of the jurisprudence as to the BOP in NOC Proceedings

36. 36 III. Pharmaceutical Patent Law – The Current System PM(NOC) Litigation 7.Parties exchange pleadings, expert affidavits, conduct witness cross examination and file legal briefs. 8.Following a hearing, the Court will either: Grant an order of prohibition preventing the Minister from approving the sale of the generic drug until expiry of the patent; or, Dismiss the application. The generic drug can be manufactured and sold.

37. 37 III. Pharmaceutical Patent Law – The Current System Section 8 If the Court dismisses the application for prohibition (or if the application is otherwise discontinued), the second person may recover any loss suffered as a result of being held off the market Second person is limited to its damages. It cannot claim the first person’s profits The second person bears no liability for compensation if the application for prohibition is successful First trial decision on section 8 damages: Apotex Inc. v. Merck & Co., Inc. et al. (October 21, 2008), Ottawa, T-1144-05 (Fed. Ct.)

38. 38 III. Pharmaceutical Patent Law – The Current System PM(NOC) Litigation – Implication of Decision If unsuccessful, the Innovator can appeal to the Federal Court of Appeal; however, once the NOC has issued, any appeal is moot. Since the Court does not rule on the ultimate validity or infringement of the patent, patent infringement and impeachment proceedings under the Patent Act are still an option.

39. 39 III. Pharmaceutical Patent Law – The Current System Data Protection (pre – October, 2006) Based on international obligations imposed by NAFTA and TRIPS Require that where a company submits confidential data to a regulatory authority when seeking approval for a new drug, the data is protected from reliance by competitors for a certain period of time after the date the drug is approved – then 5 years. Prior to the 2006 amendments, the data protection provision of the Food and Drug Regulations was interpreted narrowly by the Courts such that it was rarely, if ever, triggered See e.g. Bayer v. Attorney General of Canada (1998), 87 C.P.R. (3d) 29 (FCA) – relied on bioequivalence - not on the underlying data, so they didn’t apply

40. 40 III. Pharmaceutical Patent Law – The Current System Data Protection (post – October 2006) Amended Food and Drug Regulations prohibit issuance of a NOC to a manufacturer that makes a direct or indirect comparison to an “innovative drug” until eight (8) years after issuance of the innovators first NOC + additional 6 months for certain paediatric submissions Applies to all drugs that have received a NOC on or after June 17, 2006 A generic manufacturer may file an ANDS or trigger litigation under the PM(NOC) Regulations after 6 years Amended regulations are more in line with comparable foreign jurisdictions

41. Biologics Drugs derived from the biological activity of living organisms – Per Hughes: “bugs or bug poop” Heterogeneous, sensitive to manufacturing conditions Examples: – Produced through recombinant DNA – Hormones – Gene therapy products

42. Subsequent Entry Biologics Demonstrated similarity to the reference biologic drug – Not necessarily pharmaceutical or therapeutic equivalences Differences in quality should have no adverse impact on safety and efficacy Data from reference biologic is relevant to the SEB Approved under the existing New Drug Submission pathway under F&D Regs.

43. Thank You Don Cameron dcameron@bereskinparr.com Bereskin & Parr LLP